Minnesota Legislative Update, March 20th 2017
MN House Republicans released their budget target numbers at a press conference at the Capitol this morning.
The Minnesota Way plan focuses on three primary areas according to Ways and Means Chairman Knobloch– investments in roads and bridges, education, and reducing the cost of healthcare. Additionally, the plan aims to include $1.35B of tax reductions “to put MN families first, and put government spending in check.”Knoblach noted that the House GOP proposal had the lowest spending increase of all three proposals from the Governor, Senate, and House, and spends $1B less than the Governor’s proposal.
Total estimated spending in the House plan is $44.9 over the next two years, with $200M left in reserves.
Listed below is a breakdown of their proposal in biennial comparisons (not from projected spending for the biennium).
Committee FY16-17 FY18-19 $ Change
Education $17.4B $18.5B $1.1B
HHS $11.8B $13.7B $2B
Higher Ed $3B $3.2B $138
Public Safety $2.2B $2.3B $104M
Transportation $278M $587M $309M
Taxes + Aid $3.3B $ 3.4B $79M
Agriculture $117M $118M $1M
State Gov, Jobs $3.6B $3.1B $509M
The Senate released details of their $900 million tax reduction bill which they say "focuses on two main areas: permanent middle class tax relief and business tax relief targeting job growth". Middle class tax relief comes in the form of lowering the tax rate on the first tier, (81 percent of all taxpayers) and middle income families making less than $135,000 a year. The plan would also phase out the tax on Social Security for seniors,making less than $120,000 a year and individuals paying off student loans.
Business tax reductions include the first $100,000 of market value from the statewide business property tax and ending the automatic increases, bringing the estate tax more in line with federal law, property tax credits for agricultural land, and changing the Section 179 depreciation schedules to allow businesses to receive tax benefits earlier than current law.
2nd Deadline Passes
Friday the 18th was the second committee deadline. All policy bills must now be through the relevant committees of jurisdiction to remain viable as stand-alone legislation for the 2017 Session.
Third Committee Deadline Friday, March 31, 2017, Committees must act favorably on major appropriation and finance bills by this date. This deadline does not apply to the House Committees on Capital Investment, Ways and Means, Taxes, or Rules and Legislative Administration, nor to the Senate committees on Capital Investment, Finance, Taxes, or Rules and Administration.
Legislative Break The House and Senate will be in recess starting Saturday, April 8 through Monday, April 17. No Committee, floor, or other action will take place in either body that week.
Governors Supplemental Budget Released
$175 million to expand voluntary preK for more Minnesota families. Voluntary preschool options are especially important in Greater Minnesota, where transportation challenges make accessing other early education and child care options difficult for Minnesota families.
$10 million for Pathways to Prosperity, a strategic effort to connect Minnesotans with the education and training they need to access opportunities in high-growth, high-demand careers with family-sustaining incomes. This program provides opportunities to historically disenfranchised communities, and other individuals facing barriers to employment, to expand economic opportunity for more Minnesotans across our state.
$1.5 million to establish Farmer-Led Councils in Minnesota, to collaboratively address water quality solutions in local watersheds across Minnesota.
$1.2 million to plan and prepare for the renewed possibility of avian flu, to ensure Minnesota is ready to quickly respond to agricultural emergencies, and to monitor the wild bird population.
$500,000 to help train the next generation of agricultural educators.
$10 million a year for local aid to support county and watershed district implementation of water quality buffers.
$3 million for a six-month demonstration of rail service from Minneapolis to St. Cloud to complement current service on the Northstar line. This demonstration will allow MnDOT and the community an opportunity to demonstrate the need for continued rail service between the two communities. The Governor’s supplemental budget also includes $850,000 to conduct an engineering study on extending Northstar Service to St. Cloud. The study would update a 2010 study on engineering costs and projected ridership, to determine the estimated costs of extending the service.
$2.8 million to reimburse Roseau county for construction of drainage ditches following severe flooding in 1999 and 2002.
$1.3 million in bonding to construct a trailhead facility with parking, visitor information, and a rest stop for users of three regional trails: Prospectors Loop, the Taconite Snowmobile Trail, and the Mesabi Trail.
$2 million to support and strengthen law enforcement and community partnerships.
$560,000 to fulfill the state’s obligation to help fund soft body armor that helps keep our brave law enforcement officers safe while they serve our communities.
$42 million generated to prevent and treat opioid addiction and abuse. Governor Dayton’s budget also includes funding to improve statewide tracking of overdoses in Minnesota so law enforcement and health officials can respond more quickly and effectively
$4 million for Minnesota’s Tribal Nations and urban American Indian communities to fund prevention programs to reduce opioid abuse.
$2 million to protect vulnerable adults when they’re seeking or receiving healthcare to help vulnerable adults seeking healthcare.
$4 million to Hennepin County Medical Center and Regions Hospital
2018 Governor Race
Lieutenant Governor Tina Smith announced this week she would not run for Governor in 2018.
Smith, who replaced MN Senator Yvonne Prettner-Solon on the ticket for Dayton's reelection, looked likely to get in the race after her name was added to all official press and communications assets in the office and she began touring the state.
Declared DFL State Auditor Rebecca Otto, State Rep. Erin Murphy, St. Paul Mayor Chris Coleman
DFL Not Running U.S. Senator Amy Klobuchar, Lt. Governor Tina Smith
DFL Considering U.S. Congressman Rick Nolan, U.S. Congressman Tim Walz, Attorney General Lori Swanson, MN Senate Minority Leader Tom Bakk, Frm. MN House Speaker Paul Thissen, State Rep. Tina Liebling
GOP Considering U.S. Congressman Tom Emmer, U.S. Congressman Erik Paulsen, House Speaker Kurt Daudt, state Rep. Matt Dean, state Sen. Dave Osmek, Hennepin Sherriff Rich Stanek, frm. state Sen. David Hann, GOP Party Chair Keith Downey, Hennepin County Commissioner Jeff Johnson
GOP Not Running Former Governor Tim Pawlenty, Former U.S. Congressman John Kline
Stories in the News
Minnesota Legislative Update, March 12th 2017
Committees worked feverishly this week ahead of Friday's committee deadline.
March 10th is a full month ahead of the first deadline in many budget years; Republican leaders wanted to give them enough time to negotiate with DFL Governor Mark Dayton.
Senate Majority Leader Gazelka may also need extra time to recruit DFL votes on eventual conference committee reports on finance bills. With a 34-33 majority, just one GOP dissension will necessitate Gazelka looking across the aisle for help.
Governor Mark Dayton signed the Sunday Sales bill this week. The new law will go into effect July 2 of this year, reversing a law that dates back to Prohibition.
Speaker Daudt, who has championed Sunday Sales for years, is the biggest political winner on the issue.
The photo to the right, Daudt turns away after watching KSTP's Tom Hauser live report for the 5 o'clock news.
specifics on the schedule
Real ID fails on Senate Floor after DFL unite AGAINST It
The DFL's unified opposition was less about the policy and more about reminding the GOP about their 34-33 majority. The bill is important to the business community and has a potential to enrage average people if the legislature doesn't pass it.
Minnesota is one of the last states not in compliance with new federal requirements on state driver licenses. The feds require at least a plan for compliance by next year, when they say they will no longer be valid to pass through TSA checkpoints in airports.
If Senate Democrats unite against the coming spending bills, it means there is no room for dissent among their own caucus.
Senate Republicans could create a budget that will make their base happy and set up negotiations with the Governor every one of their members can vote for, or something more moderate that DFL'ers would join them to vote for.
REpublican LEaders Talk Priorities
Legislative Salaries Increasing
Since 1999, legislators have been paid an annual salary of $31,140. The newly-authorized panel, created by an amendment to the constitution voted this week 13-1 to increase legislators pay to $45,000 annually.
This amount does not include any per diem payments, which are still set by legislative bodies and currently stand at $66 for House members and $86 for Senators.
There are some rumblings that the legislature still has the power to appropriate the money, or not, for these increases, so this issue is likely not done for the session.
Reinsurance bills pass to floors; liberal opposition builds
Bills to create a state-run reinsurance pool passed through the remaining committees of jurisdiction is week and to the House and Senate floor. The bills, authored by Sen. Gary Dahms and Rep. Greg Davids now await action on the floor. Insurance products must be filed for 2018 soon and therefore the terms of the reinsurance program need to be finalized in order for actuaries to finish their calculations. The Individual Market is in serious trouble, and some action is needed.
DFL'ers have, for the most part, rallied around Governor Dayton's public option using MinnesotaCare, which was assumed DOA with the Minnesota Legislature.
The reinsurance bill's hefty price tag, along with the $300 million spent in SF1/HF1 to buy down premiums in 2017 is not on anyones list of favorite money spent--but it's clear that the insurance market is in such dire straights the legislature doesn't really have an option. The fact that the Federal law will change is certain, but what aspects of the ACA remains, and what new provisions make it through the process is uncertain.
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